SALMAN KHAN: I’m here
with Professor Laurence Baker at Stanford
Medical School. And what we’re going
to talk about now is the overview of the
health care system. LAURENCE BAKER: What is
the health care system? SALMAN KHAN: Yeah,
and who’s in it? LAURENCE BAKER: And who’s in it? And what are they doing? SALMAN KHAN: I think I
could give a go at it. LAURENCE BAKER: Go for it. SALMAN KHAN: And
then correct me. Expose my ignorance. So clearly, you
have your providers. Those would be your doctors,
and nurses, and all the rest. LAURENCE BAKER:
Hospitals, pharmacies, all kinds of people
are your providers. SALMAN KHAN: OK, so everyone
who’s providing health care. So that’s right over there. So that’s hospitals, doctors,
pharmacies, all the rest. And then they are providing
the health care to someone. So those would be the patients. Let me do that in another color. LAURENCE BAKER:
Call them patients. Yeah, sometimes
you get the details like people become patients
after they need health care. But some people just
have a question. They’re not really patients,
they’re just asking. SALMAN KHAN: OK. What would you call them then? LAURENCE BAKER: Call
them population. SALMAN KHAN: Population. So just the population of
the world, or of the country, or whatever– people. And then someone
has to pay for this. And so for the most
part, this is insurers. LAURENCE BAKER: Yup. Insurance companies. In the olden days–
like if you go back 100 years– we didn’t
really have insurers. We had patients and providers. And patients would– if they had
a question, they had a concern, they go to the provider. They’d make some deal,
pay them some money, do some service for
them and work it out. We got insurance
companies really only in the last
100 years, maybe. Really starting in
the US in maybe 1930. 1940, they started
to become popular. So that’s kind of
a new renovation. And those three
things work together. SALMAN KHAN: And the
general term– and this is a word I’ve seen a
lot, and sometimes it’s a little confusing because
it’s very close to payer, you hear of these payors. And that would be
including anyone who’s paying for the
paying for the service. And insurance companies
would be included there. LAURENCE BAKER: Right. So we have– we
call them payors. Sometimes we call
them health plans because they arrange for some
of the care that people get. And payors could be private
insurance companies, or they could be government
payors– government insurance companies like Medicare. SALMAN KHAN: And the insurance
companies themselves, they’re not doing this out of
the goodness of their heart. Someone is paying them. And for the most part
in the United States, it tends to be employers. LAURENCE BAKER: So right. So if we made another
arrow on your diagram here, it would be from
the population– or maybe from the patients–
to the insurance companies that provides the money for
the insurance companies to use to pay for the provider. So patients might buy
an insurance company– or not an insurance company,
buy an insurance policy. SALMAN KHAN: Only if
they’re very well healed. LAURENCE BAKER: Some of
them buy the whole thing. But they just might
buy their own policy. Go buy an insurance policy,
pay them a premium directly, the insurance company
collects that money. Or, for most people, they
work for an employer. The employer makes
the arrangement to buy that insurance and
then implicitly charges the population, the
patients for that. Maybe directly by
having them contribute some of their salary. Maybe implicitly by just
reducing the amount of cash they give them every
month, and instead giving them this
insurance policy. So people do that. And the other piece that’s
floating around in here is that in some cases,
the population pays taxes to the government that
then functions essentially as an insurer, like the
Medicare program, where there’s insurance provided to people
that’s paid for by taxes. So there’s some different
funds flows going around here, but always money
going from patients to insurers, through employers
from taxes, by direct payments. Those insurers
collecting the money and then paying for a
bunch of the care that’s provided by the providers. And that’s the
basic arrangement. There’s one more
tiny piece, which is that sometimes patients pay
the doctors or the hospitals directly. You go you have
a $20 co-payment. And so there’s a small payment
that goes back and forth. SALMAN KHAN: Your
copay is kind of there just so that– it kind of makes
the insurance company feel good that you’re not just
using it willy-nilly– that you have to
pay your $10 or $50. LAURENCE BAKER: Absolutely. So insurers know
that once they start paying the providers
for the care, and the patient says
it’s totally free, people might use
stuff that might be worth a little tiny bit, but
it costs a lot for everybody to pay for. So if you put a
co-payment on there, it makes people think
twice about using things that they don’t really need. SALMAN KHAN: Right. That makes complete sense. And then within this ecosystem–
we hear a lot about HMOs. My perception is that’s a
combination of the insurance company and the provider. It’s kind of in one package. LAURENCE BAKER: Right. So over time, the US has had
different kinds of insurers out there. In the private market,
especially, there’s been a lot of innovation
in the last 30, 40 years in types of
insurers that are out there. So we have different
insurers that have behaved in
different ways as we’ve gone through those
evolutionary cycles. So one version of that is
what we call an HMO– a health maintenance organization. And that’s really just jargon. You have to dig into it to
figure out what it means. But in a lot of
cases, what that is is a company that’s
acting as insurance. So you pay a premium to them if
you’re a patient or a person, and you buy some coverage. And then they’ll
cover your care. But they’ll do that by trying
to integrate themselves with the providers. And so the
organizations either are integrated because the HMO hires
doctors directly, or maybe owns the hospitals– like Kaiser
Permanente, for example. Or, in some cases it’s a
contractual relationship. It’s not exactly the same. SALMAN KHAN: So not all of them
is tightly linked as a Kaiser, where it’s like, you go
to this building that says Kaiser on it. And that’s where your doctor is. It could be doctors just
have their practices, but they’re tightly
linked with a– I think that’s how, what Blue Shield? Or one of those. LAURENCE BAKER: Yeah,
Blue Shield, or Aetna, or some of these
different companies. And you can start to
dig into the details and every one will be a little
bit different from the other, but they’re contractual
relationships. SALMAN KHAN: And
the difference– I think this is something
everyone faces when they sign up with insurance
with their employer– I had to do it recently–
is– they all say, you have to pick HMO versus PPO. And they’re within
the same policy. And so my perception is HMO is
you have set list of doctors that they probably
pre-negotiated pricing with. LAURENCE BAKER: Yeah. So the difference
between HMOs and PPOs gets a little bit
into the details SALMAN KHAN: OK. I don’t want to get too into– LAURENCE BAKER: We can sort
of think about it in the way that you’re talking about it. So an HMO will have
a list of doctors that you’re supposed to see. And you’ll have to go see
the doctors on that list. And a stereotypical one, if
you don’t see the doctors on that list, the
insurance company’s not going to pay
for you care, you’re going to pay for yourself. And in the stereotypical
HMO, there’s going to be a fairly
tight management between the insurance company
and the doctors about what’s going to be done, what’s
allowable, and so on. SALMAN KHAN: And in the
most tightly linked case, they’ll be the same. They doctors will be
employed by the company. That’s like Kaiser. LAURENCE BAKER: As you think
about it as a spectrum, if you move a little bit
away from that to a PPO. What’s happening in
a PPO is you’re still going to get a list,
so you’re going to be encouraged to
see those doctors, but maybe it’ll be a
little more flexibility. Like, if you decided not
to see someone on the list, the plan would still
pay some amount. Maybe not as much as they would
if you saw someone on a list, but something. Whereas in an HMO,
maybe nothing. And the plan will probably
work a little less hard at managing what those doctors
are doing to try and limit access to, say,
high cost services. HMO will tend to
work harder, PPO tends to work a
little less hard. So it’s a little
bit of a spectrum. You’re kind of moving from more
managed and more concentrated to a little less managed, but
still more so than the system we had, say, in
the ’50s or ’60s, where anybody went
to any doctor, and any doctor did
whatever they wanted. And the insurance company
just paid the bill, and there was no integration. So it’s a little bit of a– SALMAN KHAN: So that’s
the main motivation why insurance
companies are trying to get more integrated
with the providers, is because– just like you
said, in the ’50s and ’60s, you have the provider
providing a service. And obviously the
patient like the service. And then you have a third
party paying for it. And so there’s no check
on– the person deciding and the person getting it says,
yeah, let’s get more service. And someone else is– right. LAURENCE BAKER: So we
created a big issue. Insurance companies are
kind of an interesting thing in a health policy world. Because we have to have them. We have to have them to
manage the risk associated with getting sick. You get sick today
and get a huge bill. And so we can’t leave people
on their own for that. We got to have
insurance companies. But as soon as you create
insurance companies, and I can have, implicitly,
all my neighbors pay for the health
care that I want, then I might start using things that
turn out to be an efficient. And so you got to have
them– insurance companies. But you got to manage what
happens when you have them also. And so that’s the
integration between providers or co-payments and utilization
review, and all these things, are basically attempts
by insurance companies to try and manage
what economists would call the moral hazard. The using additional services
that you don’t necessarily need because everybody else is
going to pay for it for you. SALMAN KHAN: It
makes complete sense. Well thanks. That makes a ton of sense.

Insurance companies have large profit margins, even without the use of copayments. It's not really about minimizing abuse of the system, but rather maximizing profits. For every sick person there are many healthy people who pay monies to their governments or insurance providers, more than enough to pay for services for everyone. This is the conflict of interest that arises from privatizing healthcare. Healthcare is a basic necessity, and should be provided to all without prejudice. In Canada t

Something that's missing or underestimated from the map. Today, with more folks out of work, there are more without insurance. So doctors, more often than not, will charge a lower fee for those without insurance.

@skypilot805 so much misinformed.. a century ago healthcare was cheap because it suck!
and you are not forced more to pay for someone else halthcare as you pay for someone else security (police/army) or education etc .. your mentality is selfish and you let the poor and the sick fend for themself. Remember, the really SICK cannot WORK to pay for healthcare. You are just a sociopath (ie: without empathy)

@moestietabarnak "Letting the poor and the sick fend for themself"… but he's saying that everyone, including himself, should fend for themselves. Most people already do. It's just the moochers that make YOU fend for THEM. And as can be seen with our healthcare system, it distorts prices, making everything worse for everyone. Pay attention to the last line of the video, google it even: moral hazard.

@HackneyEquine Sort of – what you pay for insurance is a pretty good indicator of the likelihood of becoming ill and the cost of your procedure. But, with government-subsidized healthcare, there are no controls on what procedures can be done and how much they cost. So government subsidies make everything more expensive for everyone.

Americans are great folks, they are friendly and quite intuitive. Some of the worlds greatest inventions are American. However there is a flipside, Americans are extremely stubborn and refuse to learn from other countries. Aside from that most are very confirmation biased which means they will only see evidence that supports their believes, not evidence that falsifies them. Please americans don't be foolish, your govt isnt a conspiracy theory. Public healthcare simply works. Private? Not so muc

@fufufuyen uhm netherlands,deutschland,austria,england,sweden and so on all have full covered health care for everbody.. i just dont get the academic amarican people are so blindsided and ask to me if we have healthcare and police and or we have fresh water and a wc and connection to the sewer lolz oyeah or we have electricity all our service in europe are so good you can only dream of in america and your technology state is 10 years behind ours and you think we are the farmers im tired of it

The last line Sal says is, "It makes a ton of sense." And it does, theoretically.

My question is, how much profit are these insurance companies making? And if their profits are exorbitantly high, with patient care being overseen by management (HMO, PPO), could that money be better spent on patient care?

A related question is: is patient care subsidiary to insurance company profit?

You want to call left-wingers bitches? Call them bitches. Don't bleep it out like it somehow prevents you from committing parasitic bigotry. If you're going to dismiss half the population of the U.S.A., at least do it with some confidence. You shouldn't be trying if you lack it.

…I did not understand anything you said.
Seriously. You start with hating "libtards", then you "don't give a dam [sic] anymore". I'm not even a liberal! I'm a centrist! And what on Earth is up with the "you people had the chance to friendly you"? We're friendlying ourselves? Like, friending on Facebook? I don't even know anymore! Speak language!

You've been told to speak language before? I can't imagine why. And what's the difference between a lidtard and a libtard, anyway? And I'm not a centralist, you indepentalist Texas rattlesnake!
Also, "they're" means "they are". "Their" means it belongs to them! What does "ect ect ect" mean? Is that the sound of your Texas rattle?

Besides, you either got your ideas from someone else (in which case, you're also a sheep) or you formed a hypothe-theory and supported it with the fact that it makes sense in your head. I'm sorry to inform you that rattlesnakes are not the most mentally developed of animals. (Which explains your commenting impediment.) I may be wasting my time, but as YouTube has taught me, time-wasting can be fun!

Are insurance co. and hospitals corporations or are they non-profits ? if they are corporations then their main concern is profits not health care. By law; a corporations first concern is profits for their stock holders. So any way these two insitutions can cut costs or increase income will effect the patients care. One more thing who is deciding what treatment a patient will receive the doctor or the insurance company ?

why not thinking of healthcare and patients as two guys fighting over given amount of money, and the insurance is the judge who decide how much each will take, and as price of his judgment will take huge part of the money they are fighting for.

Also remember that there's no money in selling cars that last for decades. Only in selling cars that break quickly – so you can sell spare parts and service. Hence why you can't get a car that lasts anywhere, at all. *end of sarcasm*

In US about Health Care . When you are retire , you are real Human , good human . . .this Health care will treat you very badly , hurtly . . .Why ? Retire is mean you can not work no more because your health don't let you work . For the Heatlth care US Evil goverment doesn't give to you Health for free , you must pay a lot of moneys . But this health care did not cover Dental . . so what a hell Health care for ! That why I call Evil US .

"More money spent under the control of the health profession means that more people are operationally conditioned into playing the role of the sick, a role they are not allowed to interpret for themselves. Once they accept this role, their most trivial needs can be satisfied only through commodities that are scarce by professional definition."
– Ivan Illich

Glad my country has it made. Everyone gets free healthcare but 1.5% of the tax you pay or 8.7% of my countries GDP goes to providing that healthcare. But you also have the option to pay for a private health care plan which enables you to not have to wait in massive waiting lines and get other specialist services not covered by the Government Medicare (not the same as American Medicare).

My friend, who's a macroeconomist thinks both funeral care and health care do NOT need to be a profiting business. He said that as long as health care remains a profiting business, it will always be a slave to insurance companies.He gives huge amounts of money to Drs. Without Borders.

i think the government should just stay away from the healthcare system, all they do it make it cost more. either that or just give us free healthcare because they cant be trusted to regulate it, they have shown us that for decades.the media doesnt like to talk about it but our federal healthcare bill is really hurting the economy. we spend almost twice as much than most countries on healthcare and we dont get anything for it. the media likes to say we couldnt afford free healthcare but we totally could. the system is rotten to the core.

healthcare is a way to monitor our health by diagnosing,treating and preventing it.I was searching for a site which provides the healthcare services and I found one which was mediklik which is providing us with various healthcare services.

Health care is a human right – Health care like Army needs to open to all … If politicians really want to serve people, they have to provide health care for their citizens …If they really want a strong & healthy army …

So personally why would I ever choose an HMO policy over a PPO considering that the PPO is more flexible with who I see? Sometimes I would like to see multiple doctors to get second opinions, especially with surgical procedures, it doesnt seem HMO's offers that flexibility. So as a consumer is there a preference for one over the other?

The USA does not have a health care system. It has a health insurance industry. To say that the health insurance industry is a health care system is akin to saying that your auto insurance is your car care system.